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At year’s halfway point, is the glass half empty or half full?

Keywords: Tags  AMM Comment, John Ambrosia

At the midpoint of 2013, it’s still unclear what kind of year it will be for the steel industry. Every positive signal seems to be counterbalanced by a negative one: Low-priced natural gas will help keep costs down, but U.S. trade policy may not keep foreign steel at bay; the overall economy continues to recover at a moderate pace, but tax and employment issues threaten to dull that edge; and automotive production and sales are holding firm, but raw material costs remain volatile and possibly harmful.

The enforcement of trade laws also remains an issue. Many charge that China, Brazil, Egypt and India have imposed trade restrictions on a number of imports and exports, affecting trade in raw materials and in finished products. Some sectors, such as tube and pipe, face competition from cheaper products from Asia, especially South Korea. And there are other--potentially major--challenges. Possible tax increases, high unemployment rates and slowing growth in the manufacturing sector could become problems. Recent U.S. Environmental Protection Agency regulations have hurt, rather than helped, steelmakers, industry advocates say. And while the United States remains one of the strongest economies globally, lackluster growth and a large fiscal deficit may cause downward pressure in the near term.

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